Cuscaden, which is backed by units of state investor Temasek Holdings Pte, offered S$0.98 (US$0.72) per unit in cash via its wholly-owned subsidiary Cuscaden Peak Investments, according to a stock exchange filing today.
The offer, which values the firm at S$2.78 billion (US$2.1 billion), is 10% above its last traded price before the announcement, and 4.4% more than its net asset value at the end of 2024.
Shares of the retail-focused REIT surged as much as 11.8% to S$0.995 after a trading halt was lifted this afternoon, rising above the offer price.
Prior to today, they had been down nearly 22% from their pre-pandemic peak.
“Real estate is under challenge,” including REITs because of the interest rate environment,” Cuscaden Peak Investments CEO Gerald Yong said at a briefing.
Cuscaden and its units own 61.5% of the REIT and will abstain from voting on the deal.
The potential delisting is a blow to Singapore’s REIT market, which is one of the largest in Asia.
The city-state has been seeking to revamp its stock market, which has been eclipsed by its regional neighbours in recent years.
Paragon REIT “has faced low free float and trading liquidity, as well as limited analyst coverage and institutional investor flow” compared with its other retail REIT peers in Singapore, the firm said in the statement.
This “constrained its ability to access capital markets and expand its portfolio,” it added.
The move is another twist in the fortunes of Cuscaden, which orchestrated a high-profile S$3.9 billion takeover of Singapore Press Holdings Ltd and its property assets in 2021.
The consortium at the time was led by Ong Beng Seng. The property tycoon is facing charges in connection with an ex-government minister who obtained gifts from Ong.
A unit of the firm Ong controls, Hotel Properties Ltd, divested its stake in Cuscaden to “focus its resources on the development of its other assets,” according to a Jan 24 exchange filing.
Hotel Properties is redeveloping three of its properties along Singapore’s Orchard Road shopping strip.
Cuscaden’s Yong said the exit was negotiated commercially among his “shareholders upwards,” declining to comment further.
Paragon’s crown asset is its namesake luxury mall in Singapore’s Orchard Road shopping belt, which was valued at S$2.9 billion as of end-2024.
The shopping centre’s upscale status is also being challenged by malls undergoing major upgrades and upcoming redevelopments as well as a persistent slowdown in luxury spending, according to the offer announcement.
“Rejuvenating the mall would cost at least S$300 million and would be more suitably carried out with Paragon REIT as a private entity,” said Yong.
The trust also owns a Singapore suburban shopping centre called The Clementi Mall, and a 50% stake in the Westfield Marion Shopping Centre in Australia.